It seems even businesses aren’t immune to clichés and adages. In fact, many are using them to inform their spending approach to material handling equipment and supplies over the coming year.
“You have to spend money to make money”, seems to be the overarching theme. At least that’s the feedback Peerless Research Group (PRG) cited when they released their 2015 State of the Warehouse/Distribution Center Equipment Survey in early April.
While spending on Material Handling Equipment is predicted to increase overall, the industry as a whole will do so with a “once bitten twice shy” approach.
Positive economic growth indicators have businesses optimistic about their foreseeable fiscal future; however, these things have been known to change “on a dime”, so a growing number of warehouse and DC operators are keen to make sure that each dollar is invested wisely.
Based on responses from 448 qualified manufacturing, warehousing, corporate and aligned logistics professionals who took the survey, getting ‘smart’ about how and where they spend will have a marked effect on the purchase of certain materials handling equipment.
Image Courtesy of: Armour Dallas
How much do companies expect to spend?
Planned spending averages on material handling equipment have remained steady over the past two years totaling about $345,550 annually.
Still, roughly 60% of warehouse professionals are planning to spend less– about $250,000 in total. Another 25% have plans to spend $1 million or more, and about the same percentage amount said they are open to, and even planning to, use at least one new supplier.
Spending will be the most robust in a few designated areas
Almost half, or 43%, of total planned spending for the year will be sunk into materials handling equipment. Here’s a breakdown of what those investments look like:
- 52% plan to buy lift trucks and accessories
- 46% will focus on racks and shelving
- 33% will be allocated to totes, bins and containers
- 40% say bar coding is their biggest plan expenditure
- 31% are all about springing for wireless solutions
Technology in the warehouse
Spending on advanced technology such as labels, RFID readers and tags, and voice technology is expected to increase while bar code scanners and smart phones/tablets top the list at 65% and 62%, respectively.
Norm Saenz, managing director of St. Onge Co., a warehouse and DC consulting firm, says “Mobile technology is certainly an emerging phenomenon in the warehouse, and five years ago it wouldn’t have shown up on a survey. This will increase every year going forward.”
The survey sites safety considerations as the current most pressing issue in the warehouse. When asked what they think will emerge as more important over the next two years, “respondents predicted increased emphasis on training (65%), labor availability (57%) and ergonomics (52%).”
In-source vs outsourcing
More than 50% of warehouse managers plan to maintain vital equipment in-house, and only 12% say they have a practice of exclusively outsourcing. An additional 35% say a mix of the two serves their business best.
Robotics and automatic guided vehicles (AGV)
As of 2014, one in 10 surveyed say they already use an AGV to help with things like transportation (41%), storage (38%), bin picking (23%), truck loading (20%) and unloading (14%), and order fulfillment (20%).
Approximately 18% employ robotics for tasks such as palletizing (42%), pick and place or part transfer (36%), packing/packaging (36%), depalletizing (19%), and unpacking (12%).
Growth in E-commerce and fulfillment
The following capabilities are predicted to grow over the next year:
- “buy online, ship from vendor” (14% to 19%)
- “buy online, ship from store” (7% to 9%)
- “buy online, pickup in store” (1% to 3%)
To complete these orders, those surveyed expect that packaging might be fulfilled at various locations: point of manufacture (47%), warehouse (39%), DC (22%), fulfillment center (11%), retail store (4%) or is outsourced (3%).
In the end, “whatever will be will be”, but it appears warehouse and DC operators aren’t willing to go totally “que sera sera” just yet, preferring instead to keep a watchful eye on their monetary investments over the next 12 months.